SACRAMENTO - Three entrepreneurial companies with promising
ideas on turning rice straw into reusable products today were awarded over $2 million in grants from the California
Air Resources Board (ARB). The products, ranging from building material to cattle feed, stand out for their potential
as commercially successful alternatives to disposing of rice straw after the harvest through burning or tilling
back into the soil.

ARB Chairman John Dunlap said, "These companies and their
projects put us firmly on the win-win path of reducing air pollutants and protecting public health while creating
economic value through new products. We are committed to helping growers find practical alternatives to burning,
meet the burning phase-down targets, and create new enterprise to help local economies."

Anderson Hay & Grain Co., Inc., based in Washington, was
awarded $500,000 for its project that includes critical harvesting, baling, transportation and storage of bulk
quantities of rice straw. Anderson will also seek to export rice straw to Asian countries for use as cattle feed.

A $750,000 grant was awarded to FiberTech of Colusa County for
the production of particle board made of rice straw at a Colusa manufacturing plant. The grant will allow FiberTech
to install a manufacturing line and hire a plant manager, allowing them to begin particle board production in as
short as nine months.

The ARB awarded $820,000 to MBI International of Michigan for
its project to produce fermented animal feed for domestic dairy and beef cattle. MBI proposes to build a mobile
pilot plant in the Sacramento Valley to determine the feasibility of a full-scale operation facility. This project
has the highest projected annual usage of rice straw among this year's grant recipients.

The Rice Straw Demonstration Project Fund was enacted last year
by Senate Bill 318 (Thompson), and the ARB was named administrator. This followed the 1991 Rice Straw Burning Reduction
Act that required rice growers in the Sacramento Valley to phase out burning by 2000. The new law also requires
the ARB to help growers, businesses and others affected by the phase down find promising, commercial uses for rice
straw.

About $2 million is available for the 1997-98 fiscal year and
was allotted according to the criteria approved by the Board in January. Part of that criteria is that the bidder
provide at least 50 percent of the project cost.

The monies available through this fund are expected to bolster
promising processes that will increase the commercial uses of rice straw in the state. Up to 615,000 tons of rice
straw could be used over the next five years by these new businesses. That is just over 200,000 acres of rice straw
that will be used commercially.

Approximately 500,000 acres of rice are grown in the Sacramento
Valley annually, producing about 1.5 million tons of straw. Only one percent of the unburned straw is currently
removed from the fields and used while the remaining 99 percent is ploughed back into the ground.

The Air Resources Board is a department of the California
Environmental Protection Agency. ARB's mission is to promote and protect public health, welfare, and ecological
resources through effective reduction of air pollutants while recognizing and considering effects on the economy.
The ARB oversees all air pollution control efforts in California to attain and maintain health based air quality
standards.